Do railroad stocks pay dividends?

Yes. All of the major Class I railroad stocks pay dividends. Union Pacific has one of the longest dividend growth streaks in the industrials sector. CSX, Norfolk Southern, Canadian Pacific Kansas City and Canadian National also pay regular dividends. Railroad stocks are often held in income-oriented portfolios because of their consistent capital return programs.

What is precision scheduled railroading?

Precision scheduled railroading (PSR) is an operating strategy adopted by most Class I railroads since the late 2010s. It focuses on running fewer, longer trains on fixed schedules to reduce costs and improve asset utilization. PSR has significantly lowered operating ratios across the industry, but critics argue it has contributed to workforce reductions, deferred maintenance and service issues.

Can I buy BNSF stock directly?

No. BNSF Railway is wholly owned by Berkshire Hathaway (BRK.A / BRK.B) and does not trade as a separate stock. The only way to get exposure to BNSF is by purchasing Berkshire Hathaway shares, though BNSF represents just one part of Berkshire's diversified conglomerate.

What happened at East Palestine, Ohio?

On February 3, 2023, a Norfolk Southern freight train derailed in East Palestine, Ohio, releasing hazardous materials including vinyl chloride. The NTSB found the cause was a failed wheel bearing. Norfolk Southern agreed to a $310 million DOJ settlement in February 2025, replaced its CEO and estimates total costs will exceed $1 billion. The disaster intensified federal scrutiny of railroad safety practices across the industry.

What is the operating ratio and why does it matter?

The operating ratio is a railroad's operating expenses divided by its revenue, expressed as a percentage. A lower ratio means the railroad keeps more of each dollar earned as profit. Class I railroads typically target ratios in the mid-50s to low-60s percent range. It is the single most important profitability metric for evaluating railroad stocks and is closely watched by analysts and investors.